EOS Manager With ‘Liquidity Issues’ Can Dissolve Lip Balm Maker

A top executive of lip balm maker EOS had the right to dissolve its parent company over a leadership deadlock, even if he “contrived the circumstances giving rise to” it, but the process shortchanged the company’s other manager, a Delaware Chancery Court judge ruled.

Although the liquidation proceedings stemmed from “an inauthentic dispute,” the co-manager who initiated them “proved that the parties have an irreconcilable disagreement,” making the deadlock “genuine and sufficient to warrant dissolution,” Vice Chancellor Kathaleen McCormick wrote.

The suit, filed in October 2019 by Sanjiv Mehra, accused Jonathan Teller of seeking to “manufacture” the deadlock so he ...